The world is witnessing renewed economic strength. Generally, fundamentals are strong(er), especially in the developed markets. Policy, however, remains nervous and uncertain and drives financial market volatility. Equities in the performing markets seem fully priced. Credit continues to perform in the face of potentially higher interest rates. What can we make of all this? Let’s

Treasury is reducing issuance of T bills. At the same time they are starting issuance of 2 – 3 year FRNs. Why? There is a strong consensus among investors that rates will rise and therefore they should reduce duration. As a result they are buying shorter and shorter maturities. This trend is hurting Treasury’s ability

With consistent central bank asset purchases, the term structure of interest rates cannot find its natural market clearing level. It is difficult to know if asset bubbles are being inflated or not, and it is hard to tell if the economy is yet on a self sustaining growth path. The only way to tell, to

  Our system of politics and economics is very much a product of history, so much so that some basic questions about fairness and efficiency remain unresolved.   Why is income taxed more vigorously than capital gains? Why are the gains from gambling not taxed more aggressively?   In a meritocracy, what is to be

Markets are generally efficient in aggregate and over time. Markets can be inefficient in parts or for periods of time. Do I really believe this? Yes, provided they are proper markets by which I mean that there are sufficiently numerous independent participants, neither of which has sufficient individual influence over pricing.